Retail planning glossary.
Fifty terms to help read the plan, understand the stock position and identify the decision. A measure is useful only when its scope, timing and valuation basis are clear.
- MFP/WSSI
- Merchandise financial planning and the weekly sales, stock and intake view, treated together in Merchmix. They connect the financial plan with the merchandise assumptions and commitments.
- Open to buy (OTB)
- The remaining buying allowance under a defined plan, period and valuation basis after the relevant stock and order commitments are considered. A commitment gap is not an allowance to spend.
- Assortment planning
- Choosing the mix of products, options and depth for a defined customer, category, store group and selling period.
- Range plan
- The planned structure of styles and options for a selling period, connected to quantities and commercial assumptions.
- Option
- A product choice within a range. Its precise definition, such as a style-colour combination, should be consistent within the retailer’s data.
- SKU
- A stock-keeping identifier for a particular sellable item, often including size and colour. A style total can combine several SKUs.
- Bill of materials (BOM)
- The structured list of materials and components used for a product. A revision needs to stay consistent with the specification, cost assumptions and approval status.
- Size curve
- The percentage split of planned units across sizes for a defined merchandise scope. The shares sum to 100%.
- Size run
- The set of sizes offered for a particular product or range.
- Broken size run
- A position where some sizes in an offered size run are unavailable, even though other sizes of the style remain in stock.
- Allocation
- Assigning available or expected supply to stores, channels or other destinations under the applicable policy.
- Initial allocation
- The first distribution of stock to selling locations. It is separate from later replenishment and transfers.
- Replenishment
- A stock top-up reviewed against demand, available supply, existing commitments and the selected policy.
- Stock transfer
- A movement between locations. A transfer changes distribution; it does not increase the total units the business owns.
- Store grade
- A classification used to inform store planning or allocation. Review its basis when demand and store conditions change.
- Store cluster
- A group of stores with selected shared characteristics. The grouping basis should be relevant to the planning decision.
- Distribution centre (DC)
- A location holding and handling stock for onward distribution to other locations or channels.
- Stock on hand
- Stock recorded as held at the reporting point. Check whether the measure includes reserved, unavailable or otherwise restricted units.
- Available stock
- Stock usable for the stated purpose under the system’s availability definition. Its treatment of reservations and timing must be clear.
- Reserved stock
- Stock already committed to a defined order or purpose and therefore not automatically free for another use.
- On order
- Outstanding supply recorded against orders. It is not the same as stock already received and usable.
- In transit
- Stock moving between a source and destination, with receipt at the destination not yet confirmed.
- Intake
- Incoming stock in the merchandise plan, expressed as quantities or value on a specified basis and time period.
- Opening stock
- The stock balance at the start of the selected period, using the same unit and valuation basis as the rest of the calculation.
- Closing stock
- The stock balance at the end of the selected period after the relevant receipts, sales and other movements.
- Weeks of cover
- Stock divided by an assumed weekly unit demand or sales rate. State the rate, stock basis and period; cover is not a guarantee of availability.
- Rate of sale
- Units sold over a stated interval. The interval and merchandise scope must be consistent when comparing products.
- Sell-through
- Units sold as a proportion of the defined available or received stock basis. State the denominator, period and treatment of stock movements.
- Full-price sell-through
- Sell-through measured using sales that meet the retailer’s full-price definition. Keep the stock denominator and selling period explicit.
- Demand forecast
- An estimate of future demand for a defined product, location and period. It is separate from a confirmed customer order.
- Forecast bias
- A repeated directional tendency to overestimate or underestimate demand. State the sign convention and aggregation basis used.
- On time, in full (OTIF)
- The proportion of due orders or lines meeting both the defined timing and completeness conditions. It is not the average of two separate percentages.
- Lead time
- The interval between specified start and end events, such as order confirmation and usable receipt. Always state which events are being measured.
- Safety stock
- An explicitly justified buffer for demand or supply uncertainty, separate from expected demand during the replenishment interval.
- Reorder point
- An inventory-position threshold that triggers a review or replenishment action under a defined policy. It does not by itself define the order quantity.
- Minimum order quantity (MOQ)
- The minimum quantity allowed under an ordering constraint, such as a supplier or product requirement.
- Pre-pack
- A fixed combination of sizes or variants ordered or distributed together. The pack ratio can limit the quantities available to a store.
- Continuity line
- A product intended to remain in the range across repeated selling periods, with an ongoing supply and review policy.
- Carry-over
- A style or stock position retained into another selling period. Its future role and remaining demand still need review.
- Markdown
- A reduction in a product’s selling price, commonly used in an exit or stock-clearance plan. State how it differs from the retailer’s promotional price rules.
- Promotion
- A defined selling offer or campaign, often for a limited period. Its objective and economic basis can differ from an end-of-season markdown.
- Average selling price (ASP)
- Sales value divided by units sold for the selected scope. State the treatment of returns, discounts and tax in the data.
- Gross profit
- Sales revenue less the related cost of goods sold on the chosen accounting basis, before operating expenses outside that calculation.
- Gross margin
- Gross profit expressed as a percentage of sales revenue using a consistent basis. A constant margin percentage does not mean the same total profit.
- Landed cost
- A defined product-cost basis including the purchase cost and applicable inbound charges. The included costs depend on the retailer’s accounting policy.
- GMROI
- Gross margin return on inventory investment: gross profit divided by average inventory at cost over a defined period. Keep the period and valuation basis consistent.
- Purchase order (PO)
- An order record specifying the products, quantities and commercial terms requested from a supplier. Its confirmed status matters when assessing commitments.
- ASN
- A supplier’s advance notice describing expected consignment details and quantities, linked to the relevant order lines. A notice is not confirmation of receipt.
- Product lifecycle management (PLM)
- Managing product information and development work through specifications, materials, cost assumptions and approvals.
- Approval
- An authorised decision on a defined proposal. Approval, execution and the confirmed outcome are separate workflow states.